We all want to achieve financial freedom, and with hard work as well as having strategic plans in place, and it can be possible. Below are five insightful tips that can guide you on your journey of building a financial legacy.
Define your financial legacy and put a plan in place
The word ‘legacy’ can have different inferences and connotations to people and, as a result, many individuals feel building a financial legacy may not be attainable; however, it’s all relative. If you can have informed, long-term structures in place, it’s possible to make your money work for you and achieve your goals. What are your goals? Whether it may be building up sufficient reserves to ensure that you are prepared for retirement or being able to send your child(ren) to the best school(s), it can be accomplished.
Understand the financial products available
Before you jump into investing, it's essential to conduct thorough research into the various products on the market. Once you start an investment or take out a policy, you are entering into a legal agreement between yourself and the financial services provider, resulting in rights, obligations and responsibilities to which you and the financial services provider must adhere.
So, it would help if you had a comprehensive understanding of the terminology as well as the rules and restrictions associated with specific products and/or policies such as unit trusts. If you’re feeling overwhelmed, it’s a good idea to ask for guidance from a financial professional such as an independent financial adviser (IFA). He/she can answer fundamental questions that can help determine which investment should meet your needs. Pertinent questions that should be answered include, but are not limited to
- When can I access your money?
- Are there limits to how much I can contribute?
- What are the benefits of my contributions?
Ensure that you have a valid will
Do you have a will? If not, it should be drawn up before you start investing. A will is a legal document that indicates how, and to whom, your assets will be distributed should you die – an IFA can advise and explain what shall be required to ensure your will is legally valid.
Understand what will happen when you die
The numerous investment products and life policies available are subject to different rules and regulations regarding how the benefits are allocated when you die. Certain financial products can distribute the benefits to your estate, nominated beneficiaries and dependants.
Therefore, you should have an in-depth understanding of division of benefits as well as how long it may take for the products to payout upon your death so that you can have peace of mind that your loved ones are taken care of over the short and long term.
Seek advice from an independent financial adviser
Estate planning can become a tricky task due to the laws of the country that govern your financial products and the amount of tax that may need to be paid. Ensure that your unique circumstances are catered for and that you leave your loved ones with the legacy you had in mind.
It can be said that building a notable financial legacy is founded on your knowledge to make strategic decisions based on expert advice from an IFA. The time to start constructing your legacy is right now.